overtime Articles

On March 7, the Department of Labor (DOL) released a proposed rule to update the standard for overtime pay eligibility under the Fair Labor Standards Act. NATSO is currently analyzing the proposal and will produce a more detailed memorandum for members in the coming days. At a high level, however, the rule includes many of the recommendations that NATSO offered during a 2017 DOL Request for Information and the 2014 Obama Administration rulemaking.

A federal judge in Texas on August 31 invalidated the Obama Administration's controversial rule expanding the number of employees that are entitled to overtime pay. The focus of the judge's opinion was the fact that the rule -- which would have increased the minimum salary threshold for overtime pay from approximately $23,000 per year to approximately $47,000 per year -- insufficiently considered whether employees actually perform "white collar" jobs and thus should be exempt from overtime.

In a move that some consider to be a "political vote" rather than a substantive one, the U.S. House of Representatives on September 28 passed legislation that would delay for six months a new Department of Labor Rule revising the standards overtime pay eligibility. The rule is scheduled to take effect on December 1, 2016. Under this legislation, it would not take effect until June 1, 2016. The bill is highly unlikely to become law, and represents a political vote to enable House members to campaign on the issue during the home stretch of election season.

On May 17 the Department of Labor (DOL) released a final rule governing overtime pay under the Fair Labor Standards Act. Although the Final Rule improves upon the proposed rule, incorporating a number of NATSO's comments to DOL, it nonetheless includes a significant increase to the overtime salary threshold, and includes automatic increases in the future. This will present considerable challenges to employees and employers alike.
NATSO is still analyzing the more than 500 page rule, and will provide a detailed summary and compliance guide in the coming days.

In May 2016, the Department of Labor finalized new rules governing which employees are eligible for overtime pay. The new rules double the minimum salary threshold that employees must earn in order to be exempt from overtime pay, increasing the figure to $47,476/year ($913/week), up from the previous salary of $23,660 ($455/week). This number will be automatically updated every three years based on wage inflation. The new rules do not change the so-called “duties test” applicable to employees who earn more than this salary threshold. The new salary threshold will go into effect Dec. 1, 2016.

The Obama Administration proposed federal overtime regulations that would raise the current overtime threshold to $50,400 a year up from the current threshold of $23,660 as early as 2016. The regulation change is coming under fire from business groups and Republicans who argue it threatens jobs and will force employers to cut hours for salaried employees.